The Dollar pared losses against the EUR on Monday after the New York Federal Reserve Bank's manufacturing index fell to a record low in March, adding to worries about the U.S. economy. The USD experienced some gains, rising to $1.3000 from around $1.3055 yesterday, however it still remained down 0.9% during the trading session.
Moreover, economic data published yesterday imply that the U.S. recession is likely to deepen further. To give an example of the type of negative data emanating from the American economy, the Empire State Manufacturing Index had its worst showing since 2001! This is also a signal that economic difficulties are starting to spread from the financial sector into the mainstream economy. Investors will have to adapt themselves to the upcoming economic hardships as these changes will not rectify themselves within a short period of time.
Later today, there are several important economic data releases coming out of the U.S. The most important of these publications is the Building Permits indicator at 12:30 GMT. The release is expected to be lower than the previous figure, meaning the USD could continue a level of bearishness today. Traders should stay close to the market as there is a strong chance to capitalize on the fluctuations which will likely follow this release.
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